Giustino de Sanctis
You have won acclaim for working at the intersection of business, intellectual property and innovation – what benefits has experience of these different areas brought you?
For me, it all started with a passion for technology and innovation. I continue to marvel at how magnificent the process of innovation is and how extraordinarily humbling it is to witness first-hand brilliant creative minds at work. Ultimately, intellectual property and business are just two indispensable elements in the circle of innovation. Business – and ultimately money – is what drives the innovation machine and intellectual property provides the confidence needed by investors to fund innovation. My direct experience has reinforced my understanding of relatively simple processes in the field and has made me a strong believer in balance among all of those forces.
If you could change one thing about the current discussions in the international licensing landscape, what would it be and do you think it is likely to happen?
In our industry, it seems that we spend too little time educating both management and the public at large on the real value of patents. There is always too much emphasis on the exclusionary value of patents, which is certainly the most visible and often the most controversial aspect of patent law. However, very few make an effort to explain that the most valuable aspect of patents is the contractual exchange between inventors and the state, whereby the inventor agrees to fully disclose an invention in exchange for a potential future exclusionary right. That disclosure automatically becomes part of the state of the art and remains forever available to everybody, regardless of whether temporary exclusionary rights are eventually obtained. How critical this exchange is for innovation cannot be overstated. So, if I could change something, it would be that the discussions around patents and licensing would focus more on the positive effects of patents and the benefits of licensing to the circle of innovation.
Indeed, a false narrative of patents being a bad thing for, and a tax on, innovation has overtaken the fact that patents have been a driver for innovation for hundreds of years. And patents have been a driver for innovation primarily because the patent system pushes innovators to publicly share their knowledge literally with the entire world in exchange of a promise of the right to exclude others from doing the same thing for a limited period of time. It seems evident to me that frustrating the exclusion part will have a detrimental effect on disclosure. Patent advocacy must be increased and vested interests that seek to undermine the patent system for self-serving reasons must be challenged more often so that they do not control the narrative. I am an optimist so I believe this will happen eventually.
Which emerging technologies are currently having the biggest impact on your clients – and how is this shaping your practice?
For a long time now, we have witnessed the secular shift of value away from hardware and the increasing importance of software and services. Recently, this shift has accelerated and we have now arrived at a world where the provision of services continues to revolutionise industries. Buying hardware and software to do something is now being replaced by buying the right to use somebody else’s hardware and software with a pay-as-you-use revenue scheme. The economies of scale of this new wave are enormous and continue to concentrate revenues and profits in a small number of players. This is making it increasingly difficult to monetise intellectual property without having to face the biggest players in the industry making it very hard for any licensor – regardless of size. We are helping our clients to adapt to this change and build new royalty models that better fit these new revenue models.
Can you tell us about some of the biggest challenges you have faced in your professional life – and how you overcame them?
My passion for innovation has always driven my professional life and motivated me to continuously look for different ways to license and to find new solutions to old problems. So – naturally - the biggest challenges that I have encountered professionally have often come from taking this approach. Convincing clients and partners to go down a new route is one of the most difficult tasks and has many roadblocks. I have had my fair share of these, and my way to overcome them has always been to stay positive and continue down the road by refining my aim, without ever forgetting what I wanted to accomplish to begin with. There are times when the resistance against, and rejection of, new ideas is almost too much to take, and there are times when it would be much easier to simply give up. It is then that one needs to double down and invest more energy into overcoming the problem. Have I always overcome my challenges this way? Certainly not. But when I have, it has been to my greatest personal satisfaction. And those successes are what makes it all worthwhile.
Your company – Vectis – has recently announced the launch of a patent pool covering JPEG-XS and a patent call for a pool on the OPUS codec, both supported by well-known names in the licensing industry. What is driving Vectis’ interest in pools and what is making such prominent players choose Vectis as the administrator for these pools?
Vectis has always been focused on providing solutions that create value for everybody involved. Therefore, naturally we are big supporters of joint licensing and one of our most successful programmes was the result of an aggregation of patents from different patent owners. Moreover, the management at Vectis has been directly involved in the organisation, launch and administration of multiple pools in the past. So, it was only a matter of time before we went back to patent pools. It just so happened that we managed to announce two of them just a few months apart. We are, of course, extremely proud to have been chosen as administrator by some of the most well-known companies in licensing and I really see this is as a testament to our professional approach and our passion for what we do. I guess that our clients appreciate the attention to detail and dedication we put into everything we do.
Talking about dedication, what can you tell us about your Aliante project?
As you know, Aliante is an open and voluntary IP platform that is designed to provide a solution for financial institutions looking to mitigate IP risks arising from the technological escalation that they are experiencing, and to provide traditional technology companies with a sustainable way to generate revenues from their intellectual property.
From a philosophical perspective, the idea of Aliante is to leverage the successful business concepts and models from the sharing/platform economy and to build new collaborative norms between licensees and licensors. We think that this is the best way to overcome the challenges presented by the growth of digitalisation and technology convergence in the finance space.
It is an extremely innovative approach and we continue to work closely with a select group of top-tier financial institutions and technology companies to ensure a tailormade solution that truly balances the needs of licensees and licensors. While launching the programme is clearly taking longer than we anticipated, the platform is benefitting from many different perspectives and is ready to open a new frontier of IP mitigation and reward.
You have represented a variety of clients of different sizes and at different stages of their life cycle. How do you tailor your approach to the type of firm that you are dealing with?
We are in a service industry which serves people before serving companies and we have found that always striving to provide every client with the most professional services – regardless of the size of their firm – is the right way to go. So, I would argue that our approach does not change when addressing clients with different backgrounds and characteristics.
That said, when we work with companies that are at an earlier stage in their IP journey, we always spend time educating them so that they acquire the necessary knowledge to better navigate IP matters. When we cooperate with more IP savvy companies, we can immediately dive into what needs to be done much better. Indeed, we see this flexibility as part of the services we are happy to provide to our clients.
What tips can you share for engaging – and ensuring buy-in from – key stakeholders?
This is truly a difficult task. In my experience, the critical point is to fully understand the underlying issues. To do so, it is critical to keep an open mind and to listen. This is easier said than done. We are often too worried about how we are going to make our points and what we are going to say. The biggest downfall of being too worried about what we are going to say is to ignore what the other person is telling you. Different personalities combined with language and cultural barriers make it difficult enough to understand what the other person is trying to tell us, so not paying full attention severely hinders our ability to understand and to, therefore, establish a connection. It is only after having established a connection that real communication – and as a result buy in – can happen, so you must use your energy to listen. By the way, in my experience there are no shortcuts here, but there are some tips. Meeting in person is critical. In this era of zoom calls this can be difficult, but it continues to be necessary if one wants to make sure that your stakeholder ‘sees’ you. When meeting somebody for the first time, breaking the ice by looking for common ground or sharing experiences that your counterpart can relate to is almost invariably a good start. For example, I have often seen humour and jokes being used to break the ice, take the edge off a sharp situation, and to establish a more relaxed exchange with counterparts. But keep in mind that this only works if you are good at it and if you have the sensitivity to avoid offending your counterparts. Finally, in addition of listening and creating a connection, be respectful of your counterpart’s needs, be brief and always bring some value to the table. If this does not work, there is not much that will.
You are well known for your expertise in negotiating and closing complex IP transactions – what, for you, defines a successful deal?
The traditional metric for measuring success is economic, be it bringing in the largest amount for your client or minimising the size of a payment. It is difficult to argue that an economic success is not a success, but, for me, success is also about achieving a natural balance in the transaction. This is very difficult to do because emotions often run high when there is a dispute and this often leads parties to believe that only a total win is a win. A successful deal makes the other party aware of where the balance in the dispute lies and reaches a settlement that respects that balance. Achieving that often means not only resolving a dispute but creating goodwill that will pay dividends in the future.
Giustino de Sanctis
Giustino de Sanctis is a seasoned IP leader and serial entrepreneur who has operated at the intersection of business, intellectual property and innovation for over 25 years. Inspired by pioneers of the sharing economy, Mr de Sanctis leads the transition to Licensing 2.0 in the finance space with his latest venture Aliante. He participates in public discussions on the future of intellectual property, frequently speaks at events and universities and has authored numerous published articles.